M ILLION  D OLLAR  B ABY* FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC   *The phrase “Million Dollar Baby” sho...
 
Scenario <ul><li>Couple in their early 30’s  </li></ul><ul><li>Looking to provide a life long benefit for their newborn ch...
Lifetime Needs for Parents <ul><li>Death Benefit Protection until the child reaches adulthood </li></ul><ul><li>College ex...
Lifetime Needs for Child <ul><li>Death Benefit Protection (adulthood) </li></ul><ul><li>First home purchase (age 30)  </li...
Product – SecurePlus Provider <ul><li>Male, Age 0, Verified Standard NT  </li></ul><ul><li>Check-O-Matic Premium ($100/mon...
Product – SecurePlus Provider <ul><li>Other Assumptions:  </li></ul><ul><li>These results are based on current maximum ill...
College Expenses <ul><li>Child begins 4 years of college at age 18 </li></ul><ul><li>Parents take annual loans against the...
Home Purchases <ul><li>At age 30, child takes a loan of $25k for a down payment on his first home </li></ul><ul><li>At age...
Retirement Income <ul><li>At age 65, child takes distributions to supplement retirement income  </li></ul><ul><li>IC Solut...
Death Benefit Protection <ul><li>Initial face amount provides death benefit protection for parents  </li></ul><ul><li>Tran...
Illustrating – Cash Flow Grid FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
Illustrating – Quick Calc FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
Illustrating – Quick Calc FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
<ul><li>College Expenses  </li></ul><ul><li>$12,000 x 4 =   $48,000   </li></ul><ul><li>Mortgage Down Payment </li></ul><u...
<ul><li>Total Benefits Received = $9,049,196 </li></ul>Total Solution Total Premiums Paid = $27,000 Death Benefit at Age 1...
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Million Dollar Baby 12 08

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  • The policy will adapt to the needs of both the parents and child.
  • This is the product we utilized for this particular scenario. In order to illustration this in IC solutions, we configured using the following parameters.
  • This is the product we utilized for this particular scenario. In order to illustration this in IC solutions, we configured using the following parameters.
  • When the child attends college at age 18, the parents plan to take loans against the cash value of the policy to supplement tuition costs. This yields distributions in the amount of $12k, which will be taken yearly until the child’s graduation.
  • At age 30, the child will access his policy’s cash value by taking a loan of $25k to be used as a down payment on his first home. At age 45, the child will take a second loan of $100k to purchase a vacation condo. All of these distributions will be received tax free.
  • Anticipating retirement at age 65, the child will begin a distribution stream to supplement his retirement income. IC Solutions calculates the loans to be almost $250k each year. This distribution stream continues until the child reaches age 100, leaving a large death benefit and ample cash value inside the policy.
  • The initial face amount of $200k provides early death benefit protection for the parents. When the child reaches adulthood, the parents plan to transfer the policy over to their son, thus allowing him to use the death benefit to protect his own family. By time the child is in his mid 50’s, his death benefit is projected to reach over $1 million.
  • This is how everything is inputted and organized in the software. You will notice the premium outlay and distributions must be configured using the Cash Flow Grid in the Premiums/Distributions section of the software.
  • This Quick Calc as created in IC solutions. This Agent’s Only report can be referenced to ensure the case is correctly designed. As we scroll through the document, we will verify the many distributions our of the policy.
  • Page 2 of the Quick Calc.
  • Lets summarize the benefits from the couples SecurePlus Provider Policy.
  • This is the total solution. The policy provides for living benefits during the lifetime of the child, as well as an ample death benefit. This benefits assume the child lives to age 100. The most staggering statistic of all is the total premiums paid into the policy, a mere $27,000.
  • Million Dollar Baby 12 08

    1. 1. M ILLION D OLLAR B ABY* FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC *The phrase “Million Dollar Baby” should not be used with the public TC44692(1208)
    2. 3. Scenario <ul><li>Couple in their early 30’s </li></ul><ul><li>Looking to provide a life long benefit for their newborn child </li></ul><ul><li>Want a product that can adapt to the child’s many life stages </li></ul><ul><li>Affordability is an issue </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    3. 4. Lifetime Needs for Parents <ul><li>Death Benefit Protection until the child reaches adulthood </li></ul><ul><li>College expenses (child age 18 to 22) </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Surrender charges may reduce the policy’s cash value in early years.
    4. 5. Lifetime Needs for Child <ul><li>Death Benefit Protection (adulthood) </li></ul><ul><li>First home purchase (age 30) </li></ul><ul><li>Second home (age 45) </li></ul><ul><li>Retirement income (age 65 and on) </li></ul><ul><li>Access to Death Benefit (while living) </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC Receipt of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy, and may result in a taxable event.
    5. 6. Product – SecurePlus Provider <ul><li>Male, Age 0, Verified Standard NT </li></ul><ul><li>Check-O-Matic Premium ($100/month) </li></ul><ul><li>$200k Face Amount </li></ul><ul><li>Option B (increasing) Death Benefit </li></ul><ul><li>Guaranteed Insurability Rider ($50k) </li></ul><ul><li>Accelerated Benefit Riders – No Cost </li></ul><ul><li>Parent owns policy until child’s age 22, then child owns policy </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    6. 7. Product – SecurePlus Provider <ul><li>Other Assumptions: </li></ul><ul><li>These results are based on current maximum illustrated rates as of 9/2/08 of 8.1% Point to Point High Cap. These values are not guaranteed. At the guaranteed rate of 2%, the cash value at age 19 / year 20 is $0 and the policy will not support the illustrated distributions. </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    7. 8. College Expenses <ul><li>Child begins 4 years of college at age 18 </li></ul><ul><li>Parents take annual loans against the cash value to supplement tuition costs </li></ul><ul><li>Produces 4 separate income tax-free distributions totaling $48k </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Surrender charges may reduce the policy’s cash value in early years.
    8. 9. Home Purchases <ul><li>At age 30, child takes a loan of $25k for a down payment on his first home </li></ul><ul><li>At age 45, child purchases a vacation home with a second loan of $100k </li></ul><ul><li>Distributions are received income tax-free </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    9. 10. Retirement Income <ul><li>At age 65, child takes distributions to supplement retirement income </li></ul><ul><li>IC Solutions calculates the loans to be almost $250k per year </li></ul><ul><li>Distributions continue until age 100 </li></ul><ul><li>Leaves a large death benefit with sufficient cash value at maximum illustrated rates </li></ul><ul><li>At guaranteed rate of 2%, cash value at age 19 / year 20 is $0 </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    10. 11. Death Benefit Protection <ul><li>Initial face amount provides death benefit protection for parents </li></ul><ul><li>Transfer of policy from parents to child provides death benefit protection for child’s family </li></ul><ul><li>Death benefit is projected to reach over $1 million by mid 50’s </li></ul>FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    11. 12. Illustrating – Cash Flow Grid FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    12. 13. Illustrating – Quick Calc FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    13. 14. Illustrating – Quick Calc FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    14. 15. <ul><li>College Expenses </li></ul><ul><li>$12,000 x 4 = $48,000 </li></ul><ul><li>Mortgage Down Payment </li></ul><ul><li>$25,000 </li></ul><ul><li>Vacation Condo </li></ul><ul><li>$100,000 </li></ul><ul><li>Retirement Income </li></ul><ul><li>$246,561 x 36 = $8,876,196 </li></ul>Total Solution FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC
    15. 16. <ul><li>Total Benefits Received = $9,049,196 </li></ul>Total Solution Total Premiums Paid = $27,000 Death Benefit at Age 100 = $15,695,320 FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC Based on achieving the assumed interest rate in all years of the policy:

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